TENNECO INC. SUPPLEMENTAL SEGMENT DATA Unaudited (Millions) Q Global Segments OE Ride Performance Aftermarket Total Other

Transcription

1 SUPPLEMENTAL SEGMENT DATA Q Revenues from external customers $ 1,555 $ 428 $ 309 $ 2,292 $ - $ - $ 2,292 Intersegment revenues (51) $ (42) - $ 121 assets 2,809 1, , $ 4,642 Q Revenues from external customers $ 1,539 $ 442 $ 336 $ 2,317 $ - $ - $ 2,317 Intersegment revenues (40) $ (151) - $ 27 assets 2,907 1, , $ 4,881 Q Revenues from external customers $ 1,495 $ 457 $ 322 $ 2,274 $ - $ - $ 2,274 Intersegment revenues (36) $ (23) - $ 134 assets 2,922 1, , $ 4,935 Q Revenues from external customers $ 1,627 $ 480 $ 284 $ 2,391 $ - $ - $ 2,391 Intersegment revenues (38) $ (27) - $ 135 assets 2,812 1, , $ 4,842 We are a global manufacturer organized and manage our business along our three segments (Global, Global Performance and Global Aftermarket). The reporting segments are aligned with key growth strategies. Costs related to other business activities, primarily corporate headquarter functions, are disclosed separately from the three operating segments as "Other." We evaluate segment performance based primarily on earnings before interest expense, income taxes, and noncontrolling interests. Products are transferred between segments and geographic areas on a basis intended to reflect as nearly as possible the market value of the products.

2 SUPPLEMENTAL SEGMENT DATA FY 2017 Revenues from external customers $ 6,216 $ 1,807 $ 1,251 $ 9,274 $ - $ - $ 9,274 Intersegment revenues (165) $ - taxes and noncontrolling interests (243) - $ 417 assets 2,812 1, , $ 4,842 Revenues from external customers $ 5,764 $ 1,593 $ 1,242 $ 8,599 $ - $ - $ 8,599 Intersegment revenues (192) $ - taxes and noncontrolling interests (204) - $ 516 assets 2, , $ 4,346 FY 2015 Revenues from external customers $ 5,377 $ 1,545 $ 1,259 $ 8,181 $ - $ - $ 8,181 Intersegment revenues (202) $ - taxes and noncontrolling interests (100) - $ 508 assets 2, , $ 3,970

3 RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES Q Global Division $ 1,555 $ 547 $ 1,008 $ (21) $ 1,029 Global Performance Division (4) 432 Global Aftermarket Division Tenneco Inc. $ 2,292 $ 547 $ 1,745 $ (24) $ 1,769 Q Global Division $ 1,539 $ 541 $ 998 $ (11) $ 1,009 Global Performance Division Global Aftermarket Division (1) 337 Tenneco Inc. $ 2,317 $ 541 $ 1,776 $ (14) $ 1,790 Q Global Division $ 1,495 $ 522 $ 973 $ 27 $ 946 Global Performance Division Global Aftermarket Division Tenneco Inc. $ 2,274 $ 522 $ 1,752 $ 41 $ 1,711 Q Global Division $ 1,627 $ 577 $ 1,050 $ 37 $ 1,013 Global Performance Division Global Aftermarket Division Tenneco Inc. $ 2,391 $ 577 $ 1,814 $ 66 $ 1,748 Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.

4 RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES FY 2017 Global Division $ 6,216 $ 2,187 $ 4,029 $ 32 $ 3,997 Global Performance Division 1,807-1, ,780 Global Aftermarket Division 1,251-1, ,241 Tenneco Inc. $ 9,274 $ 2,187 $ 7,087 $ 69 $ 7,018 Global Division $ 5,764 $ 2,028 $ 3,736 $ - $ 3,736 Global Performance Division 1,593-1,593-1,593 Global Aftermarket Division 1,242-1,242-1,242 Tenneco Inc. $ 8,599 $ 2,028 $ 6,571 $ - $ 6,571 Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.

5 RECONCILIATION OF GAAP (1) REVENUE TO NON-GAAP REVENUE MEASURES Global Division $ 5,764 $ 2,028 $ 3,736 $ (101) $ 3,837 Global Performance Division 1,593-1,593 (44) 1,637 Global Aftermarket Division 1,242-1,242 (37) 1,279 Tenneco Inc. $ 8,599 $ 2,028 $ 6,571 $ (182) $ 6,753 FY 2015 Global Division $ 5,377 $ 1,888 $ 3,489 $ - $ 3,489 Global Performance Division 1,545-1,545-1,545 Global Aftermarket Division 1,259-1,259-1,259 Tenneco Inc. $ 8,181 $ 1,888 $ 6,293 $ - $ 6,293 Tenneco presents the above reconciliation of revenues in order to reflect value-add revenues separately from the effects of doing business in currencies other than the U.S. dollar. Additionally, substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Tenneco uses this information to analyze the trend in revenues before these factors. Tenneco believes investors find this information useful in understanding period to period comparisons in the company's revenues.

6 Q EBIT $ 94 $ 27 $ 42 $ 163 $ (42) $ 121 Restructuring and related expenses Pension charges / Stock vesting (3) Adjusted EBIT $ 103 $ 30 $ 44 $ 177 $ (30) $ 147 Q EBIT $ 106 $ 18 $ 54 $ 178 $ (151) $ 27 Restructuring and related expenses Antitrust settlement accrual (4) Warranty settlement (5) Gain on sale of unconsolidated JV (6) (5) (5) Adjusted EBIT $ 118 $ 27 $ 55 $ 200 $ (22) $ 178 Q EBIT $ 100 $ 7 $ 50 $ 157 $ (23) $ 134 Restructuring and related expenses Adjusted EBIT $ 104 $ 21 $ 52 $ 177 $ (23) $ 154 Q EBIT $ 121 $ 9 $ 32 $ 162 $ (27) $ 135 Restructuring and related expenses Goodwill impairment charge (7) Pension charges (3) Adjusted EBIT $ 125 $ 26 $ 41 $ 192 $ (24) $ 168 TENNECO INC. RECONCILIATION OF GAAP (1) TO NON-GAAP EARNINGS MEASURES Tenneco presents the above reconciliation of GAAP to non-gaap earnings measures primarily to reflect the results in a manner that allows a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of the company and other items impacting comparability between the periods. Adjustments similar to the ones reflected above have been recorded in earlier periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. Using only the non-gaap earnings measures to analyze earnings would have material limitations because its calculation is based on the subjective determinations of management regarding the nature and classification of events and circumstances that investors may find material. Management compensates for these limitations by utilizing both GAAP and non- GAAP earnings measures reflected above to understand and analyze the results of the business. The company believes investors find the non-gaap information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company's financial results in any particular period. (3) Charges related to Pension derisking and the acceleration of restricted stock vesting in accordance with the long-term incentive plan. (4) Charges related to establish a reserve for settlement costs necessary to resolve the company s antitrust matters globally. (5) Warranty settlement with customer. (6) Gain on sale of unconsolidated JV. (7) Goodwill impairment charges recorded in Europe and South America Ride Performance Division.

7 RECONCILIATION OF GAAP (1) TO NON-GAAP EARNINGS MEASURES FY 2017 EBIT $ 421 $ 61 $ 178 $ 660 $ (243) $ 417 Restructuring and related expenses Antitrust settlement accrual (3) Warranty settlement (4) Gain on sale of unconsolidated JV (5) (5) (5) Goodwill impairment charge (6) Pension charges / Stock vesting (7) Adjusted EBIT $ 450 $ 104 $ 192 $ 746 $ (99) $ 647 EBIT $ 432 $ 97 $ 191 $ 720 $ (204) $ 516 Restructuring and related expenses Pension charges (7) Adjusted EBIT $ 439 $ 112 $ 203 $ 754 $ (130) $ 624 FY 2015 EBIT $ 371 $ 63 $ 174 $ 608 $ (100) $ 508 Restructuring and related expenses Pension charges (7) Adjusted EBIT $ 380 $ 103 $ 188 $ 671 $ (96) $ 575 Tenneco presents the above reconciliation of GAAP to non-gaap earnings measures primarily to reflect the results in a manner that allows a better understanding of the results of operational activities separate from the financial impact of decisions made for the long-term benefit of the company and other items impacting comparability between the periods. Adjustments similar to the ones reflected above have been recorded in earlier periods, and similar types of adjustments can reasonably be expected to be recorded in future periods. Using only the non-gaap earnings measures to analyze earnings would have material limitations because its calculation is based on the subjective determinations of management regarding the nature and classification of events and circumstances that investors may find material. Management compensates for these limitations by utilizing both GAAP and non- GAAP earnings measures reflected above to understand and analyze the results of the business. The company believes investors find the non-gaap information helpful in understanding the ongoing performance of operations separate from items that may have a disproportionate positive or negative impact on the company's financial results in any particular period. (3) Charges related to establish a reserve for settlement costs necessary to resolve the company s antitrust matters globally. (4) Warranty settlement with customer. (5) Gain on sale of unconsolidated JV. (6) Goodwill impairment charges recorded in Europe and South America Ride Performance Division. (7) Charges related to Pension derisking and the acceleration of restricted stock vesting in accordance with the long-term incentive plan.

8 RECONCILIATION OF GAAP (1) REVENUE AND EARNINGS TO NON-GAAP REVENUE AND EARNINGS MEASURES (Millions except percents) Q $ 1,555 $ 428 $ 309 $ 2,292 $ - $ 2,292 Less: Substrate sales Value-add revenues $ 1,008 $ 428 $ 309 $ 1,745 $ - $ 1,745 EBIT $ 94 $ 27 $ 42 $ 163 $ (42) $ 121 EBIT as a % of revenue 6.0% 6.3% 13.6% 7.1% 5.3% EBIT as a % of value-add revenue 9.3% 6.3% 13.6% 9.3% 6.9% Adjusted EBIT $ 103 $ 30 $ 44 $ 177 $ (30) $ 147 Adjusted EBIT as a % of revenue 6.6% 7.0% 14.2% 7.7% 6.4% Adjusted EBIT as a % of value-add revenue 10.2% 7.0% 14.2% 10.1% 8.4% Q $ 1,539 $ 442 $ 336 $ 2,317 $ - $ 2,317 Less: Substrate sales Value-add revenues $ 998 $ 442 $ 336 $ 1,776 $ - $ 1,776 EBIT $ 106 $ 18 $ 54 $ 178 $ (151) $ 27 EBIT as a % of revenue 6.9% 4.1% 16.1% 7.7% 1.2% EBIT as a % of value-add revenue 10.6% 4.1% 16.1% 10.0% 1.5% Adjusted EBIT $ 118 $ 27 $ 55 $ 200 $ (22) $ 178 Adjusted EBIT as a % of revenue 7.7% 6.1% 16.4% 8.6% 7.7% Adjusted EBIT as a % of value-add revenue 11.8% 6.1% 16.4% 11.3% 10.0% Q $ 1,495 $ 457 $ 322 $ 2,274 $ - $ 2,274 Less: Substrate sales Value-add revenues $ 973 $ 457 $ 322 $ 1,752 $ - $ 1,752 EBIT $ 100 $ 7 $ 50 $ 157 $ (23) $ 134 EBIT as a % of revenue 6.7% 1.5% 15.5% 6.9% 5.9% EBIT as a % of value-add revenue 10.3% 1.5% 15.5% 9.0% 7.6% Adjusted EBIT $ 104 $ 21 $ 52 $ 177 $ (23) $ 154 Adjusted EBIT as a % of revenue 7.0% 4.6% 16.1% 7.8% 6.8% Adjusted EBIT as a % of value-add revenue 10.7% 4.6% 16.1% 10.1% 8.8% Q $ 1,627 $ 480 $ 284 $ 2,391 $ - $ 2,391 Less: Substrate sales Value-add revenues $ 1,050 $ 480 $ 284 $ 1,814 $ - $ 1,814 EBIT $ 121 $ 9 $ 32 $ 162 $ (27) $ 135 EBIT as a % of revenue 7.4% 1.9% 11.3% 6.8% 5.6% EBIT as a % of value-add revenue 11.5% 1.9% 11.3% 8.9% 7.4% Adjusted EBIT $ 125 $ 26 $ 41 $ 192 $ (24) $ 168 Adjusted EBIT as a % of revenue 7.7% 5.4% 14.4% 8.0% 7.0% Adjusted EBIT as a % of value-add revenue 11.9% 5.4% 14.4% 10.6% 9.3% Tenneco presents the above reconciliation of revenues in order to reflect EBIT as a percent of both total revenues and value-add revenues. Substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Further, presenting EBIT as a percent of value-add revenue assists investors in evaluating our company's operational performance without the impact of such substrate sales.

9 RECONCILIATION OF GAAP (1) REVENUE AND EARNINGS TO NON-GAAP REVENUE AND EARNINGS MEASURES (Millions except percents) FY 2017 $ 6,216 $ 1,807 $ 1,251 $ 9,274 $ - $ 9,274 Less: Substrate sales 2, ,187-2,187 Value-add revenues $ 4,029 $ 1,807 $ 1,251 $ 7,087 $ - $ 7,087 EBIT $ 421 $ 61 $ 178 $ 660 $ (243) $ 417 EBIT as a % of revenue 6.8% 3.4% 14.2% 7.1% 4.5% EBIT as a % of value-add revenue 10.4% 3.4% 14.2% 9.3% 5.9% Adjusted EBIT $ 450 $ 104 $ 192 $ 746 $ (99) $ 647 Adjusted EBIT as a % of revenue 7.2% 5.8% 15.3% 8.0% 7.0% Adjusted EBIT as a % of value-add revenue 11.2% 5.8% 15.3% 10.5% 9.1% $ 5,764 $ 1,593 $ 1,242 $ 8,599 $ - $ 8,599 Less: Substrate sales 2, ,028-2,028 Value-add revenues $ 3,736 $ 1,593 $ 1,242 $ 6,571 $ - $ 6,571 EBIT $ 432 $ 97 $ 191 $ 720 $ (204) $ 516 EBIT as a % of revenue 7.5% 6.1% 15.4% 8.4% 6.0% EBIT as a % of value-add revenue 11.6% 6.1% 15.4% 11.0% 7.9% Adjusted EBIT $ 439 $ 112 $ 203 $ 754 $ (130) $ 624 Adjusted EBIT as a % of revenue 7.6% 7.0% 16.3% 8.8% 7.3% Adjusted EBIT as a % of value-add revenue 11.8% 7.0% 16.3% 11.5% 9.5% FY 2015 $ 5,377 $ 1,545 $ 1,259 $ 8,181 $ - $ 8,181 Less: Substrate sales 1, ,888-1,888 Value-add revenues $ 3,489 $ 1,545 $ 1,259 $ 6,293 $ - $ 6,293 EBIT $ 371 $ 63 $ 174 $ 608 $ (100) $ 508 EBIT as a % of revenue 6.9% 4.1% 13.8% 7.4% 6.2% EBIT as a % of value-add revenue 10.6% 4.1% 13.8% 9.7% 8.1% Adjusted EBIT $ 380 $ 103 $ 188 $ 671 $ (96) $ 575 Adjusted EBIT as a % of revenue 7.1% 6.7% 14.9% 8.2% 7.0% Adjusted EBIT as a % of value-add revenue 10.9% 6.7% 14.9% 10.7% 9.1% Tenneco presents the above reconciliation of revenues in order to reflect EBIT as a percent of both total revenues and value-add revenues. Substrate sales include precious metals pricing, which may be volatile. Substrate sales occur when, at the direction of its OE customers, Tenneco purchases catalytic converters or components thereof from suppliers, uses them in its manufacturing processes and sells them as part of the completed system. While Tenneco original equipment customers assume the risk of this volatility, it impacts reported revenue. Excluding substrate sales removes this impact. Further, presenting EBIT as a percent of value-add revenue assists investors in evaluating our company's operational performance without the impact of such substrate sales.

10 RECONCILIATION OF GAAP (1) EBIT TO EBITDA INCLUDING NONCONTROLLING INTERESTS Q $ 94 $ 27 $ 42 $ 163 $ (42) $ 121 Depreciation and amortization of other intangibles $ 127 $ 42 $ 46 $ 215 $ (42) $ 173 Q $ 106 $ 18 $ 54 $ 178 $ (151) $ 27 Depreciation and amortization of other intangibles $ 141 $ 33 $ 59 $ 233 $ (151) $ 82 Q $ 100 $ 7 $ 50 $ 157 $ (23) $ 134 Depreciation and amortization of other intangibles $ 136 $ 24 $ 55 $ 215 $ (23) $ 192 Q $ 121 $ 9 $ 32 $ 162 $ (27) $ 135 Depreciation and amortization of other intangibles $ 158 $ 26 $ 37 $ 221 $ (27) $ 194 EBITDA including noncontrolling interests represents income before interest expense, income taxes, noncontrolling interests and depreciation and amortization. EBITDA including noncontrolling interests is not a calculation based upon generally accepted accounting principles. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income (loss) attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze our EBITDA including noncontrolling interests for similar purposes. Tenneco also believes EBITDA including noncontrolling interests assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon many factors. However, the EBITDA including noncontrolling interests measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.

11 RECONCILIATION OF GAAP (1) EBIT TO EBITDA INCLUDING NONCONTROLLING INTERESTS FY 2017 $ 421 $ 61 $ 178 $ 660 $ (243) $ 417 Depreciation and amortization of other intangibles $ 562 $ 125 $ 197 $ 884 $ (243) $ 641 $ 432 $ 97 $ 191 $ 720 $ (204) $ 516 Depreciation and amortization of other intangibles $ 563 $ 154 $ 215 $ 932 $ (204) $ 728 FY 2015 $ 371 $ 63 $ 174 $ 608 $ (100) $ 508 Depreciation and amortization of other intangibles $ 494 $ 118 $ 199 $ 811 $ (100) $ 711 EBITDA including noncontrolling interests represents income before interest expense, income taxes, noncontrolling interests and depreciation and amortization. EBITDA including noncontrolling interests is not a calculation based upon generally accepted accounting principles. The amounts included in the EBITDA including noncontrolling interests calculation, however, are derived from amounts included in the historical statements of income data. In addition, EBITDA including noncontrolling interests should not be considered as an alternative to net income (loss) attributable to Tenneco Inc. or operating income as an indicator of the company's operating performance, or as an alternative to operating cash flows as a measure of liquidity. Tenneco has presented EBITDA including noncontrolling interests because it regularly reviews EBITDA including noncontrolling interests as a measure of the company's performance. In addition, Tenneco believes its investors utilize and analyze our EBITDA including noncontrolling interests for similar purposes. Tenneco also believes EBITDA including noncontrolling interests assists investors in comparing a company's performance on a consistent basis without regard to depreciation and amortization, which can vary significantly depending upon many factors. However, the EBITDA including noncontrolling interests measure presented may not always be comparable to similarly titled measures reported by other companies due to differences in the components of the calculation.